Book Review: Generation Rent by Shamubeel Eaqub and Selena Eaqub
'Generation Rent’ was a much needed, awakening read about the state of our country’s housing market and economy. From my point of view (being a 25 year old married female who rents – along with more than 80% of people in my age group), I think all New Zealand residents should pick up ‘Generation Rent’ and hopefully they will gain, like I did, a whole new way of looking at buying and renting property.
The big question adorning the book cover was “Is the New Zealand housing market broken?” and after only reading the first chapter my answer was simply “yes”. I’ll share with you five out of the many points I took away from reading ‘Generation Rent’ which only scratches the surface to explain why the housing market is “broken”.
- Relative to income, it is much more expensive to buy a house for the current generation of first home buyers. Until the late 1980s New Zealand house prices were equal to 3 or fewer years of annual household income – now it requires just over five years of the average household’s income to buy the average house and over eight years for the Auckland region.
- Being a renter in New Zealand is seen as a “second-rate existence” and is epitomised by the short term nature of tenancy agreements and limitations that go along with them. For example, the majority of tenants are forbidden from making any alterations to the property they inhabit. Some alterations as little as putting picture hooks in the wall to decorate makes it not so easy for a property to really feel like a home and is an inadequate alternative to being a home owner.
- New Zealand’s housing supply is not suitable for the population’s demand. Data from the 2006 and 2013 Censuses tells us that while 73% of the new housing supply is in large homes (four or more bedrooms) 67% of the increase in demand is for one and two bedroom houses – for which only 12% accounted for the new supply of houses. Unless something changes this problem will only worsen as the population ages and increases.
- Generally, land and building regulations are restricting our ability to use land to its full potential. “Even if every household in New Zealand has a quarter-acre section, we could all fit into the Kaikoura District area (2050 square kilometres).” However, we’ve created a “scarcity” of land due to how we restrict the use of it. Relaxing some planning and building rules, without losing the parts that help to reduce the costs of population density, would mean we would require less land to fulfill the housing needs of the population. This doesn’t mean high-rise towers either, just one or two more storeys across a large area.
- I can’t speak for all Kiwis but I believe a lot of us lack the information and financial literacy to choose an alternative to investing in property. Given that over half of all Kiwis live in a rented home there is definitely room for improving investment opportunities in other areas. This would redirect funds to potentially invest in businesses and in turn grow our economy and provide more income and jobs in the community.
I applaud Shamubeel Eaqub and Selena Eaqub for publishing this book. It has made me think long and hard about my future in the property market, whether it will be renting long-term or putting some of my eggs into the property basket. I really hope that ‘Generation Rent’ will be a contributing step towards mending our broken housing market and creating a more habitable New Zealand.
Have you read Generation Rent? What are your thoughts?